High Inflation, Wages Could Mean BOE Raises Rates -2-

1015 GMT - Although Anpario reports a challenging 1H the second-half outlook is improving as customer input inflationary pressures begin to ease, Shore Capital analysts Akhil Patel and Clive Black say in a note. The animal-feed additives manufacturer says that despite a challenging global agricultural environment sales of its higher-added value products were resilient, the analysts say. Furthermore, the board highlights there are positive improvement signs--although geographically dependent and reflecting a normalization of inflationary pressures--and a tightening supply of meat improving farmer margins, the analysts say. "In our view, after its significant derating, Anpario now presents an attractive opportunity for rating as well as earnings expansion," they say. Shore Capital has Anpario as a house stock. Shares are down 6.6% at 212.50 pence. ([e-mail])

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Tullow Oil Could Be Significantly Underleveraged in Coming Years

0959 GMT - Tullow Oil looks on track to meet full-year targets, while its cash flow outlook looks very supportive as the company looks to refinance debt, Davy Research analyst Colin Grant writes in a research note. The Africa-focused oil producer's net debt should reduce significantly by end-2024 as the company continues to see cumulative free cash flow of $800 million in 2023-25. "With the spot price of Brent rebounding above $92 per barrel, investors need to consider the potential for Tullow to achieve up to $1.5 billion in free cash flow in 2023-25, assuming $100/bbl," the analyst says. This would leave the business with an excessively low ratio of debt to equity, Grant says. Davy rates the stock outperform with a 100-pence price target. ([e-mail])

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CAB Payments' Strong 1H Supports FY Views

0943 GMT - CAB Payments' solid first-half results support expectations for the full year, Peel Hunt says in a note after the London-listed fintech group's pretax profit more than doubled on year and it backed its views for 2023. "We anticipate no material changes to our estimates, albeit acknowledge that the contribution from net interest income will be higher in the revenue mix for 2023," analyst Gautam Pillai writes. The company's growth momentum is solid as it continues to be in investment mode while still expecting to deliver margins around current market views of around 51% for the year, the analyst adds. Peel Hunt rates the stock buy. Shares rise 8.8% at 285.5 pence.([e-mail])

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St. James's Place's New CEO Can Improve Operating Leverage

0943 GMT - St. James's Place's new CEO can help improve the group's operating leverage by reducing costs and expenses further, UBS says in a note after the wealth manager named Mark FitzPatrick--formerly interim CEO and CFO at Prudential PLC--as CEO designate to replace Andrew Croft. "We believe a turnaround in SJP's share price will be led by an improvement in the U.K. macro environment, including reaching peak inflation and interest rates," analysts write, pointing to the stock's 24% drop since the start of the year and underperformance against peers and the FTSE 100 index. UBS rates the stock neutral. Shares edge down 0.3% at 855.2 pence. ([e-mail])

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AB Foods' Primark Weak 2H Performance Could Dent Optimism

0941 GMT - AB Foods' latest Primark performance update shows a weaker-than-expected second-half EBIT margin, which may dent some of the optimism alongside the risk of clothing price deflation, Deutsche Bank analyst Adam Cochrane says in a note. On the positive side, the clothing retailer should see a recovery in gross margin for FY 2024, backed by lower input costs, freight and foreign-exchange costs, which should translate into an improved EBIT margin as current consensus expects it to be in the range of 9.5% to 10%, the analyst says. DB downgrades the stock recommendation to hold from buy and target price to 2,260 pence from 2,350 pence. ([e-mail])

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BP's Swift Reaction Could Reassure Investors

0933 GMT - BP investors may be reassured by the swift reaction of the company after now-ex CEO Bernard Looney failed to disclose previous relations with staff, AJ Bell Investment Director Russ Mould says in a market comment. "Assuming this is largely the end of the matter, even if an investigation by legal counsel remains ongoing, and CFO Murray Auchincloss can lead the company through the transition to a new leader, then little harm may be done to the business," Mould says. "The nagging worry is that this is the tip of an iceberg and is reflective of wider problems with BP's workplace culture," he says. ([e-mail])

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Duke Royalty's Continued Growth Points to Upside for Shares

0914 GMT - Duke Royalty shares are seen with upside from potential future portfolio realizations, Shore Capital says in a note after the provider of alternative capital posted a record first-quarter recurring cash revenue and issued guidance for more growth in the second quarter. "We believe that Duke's long-term financing product remains attractive for small and medium-sized companies that are seeking the certainty of a long-term funding solution without the risk of material equity dilution," analyst Gary Greenwood writes. Shore keeps its buy rating on the stock. Shares in London rise 3.9% to 33.25 pence. ([e-mail])

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(END) Dow Jones Newswires

09-13-23 0722ET